Social Responsibility and Child Labour Essay

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Introduction
In recent years, Corporate Social Responsibility (“CSR” in short) has aroused the public attention (The Economist, 2008). It defines that firms should take the responsibilities of bringing good impacts to the society, for instance protecting the environment and respecting the human rights of their employees, instead of just focusing on the interests of shareholders and earning the most profits. Nowadays, companies of different industries set up code of ethics in their operations. Though they would claim that the rules were following, it is not uncommon for the media to uncover that their operations were not ethical enough. Gap, a famous high-street brand of fashion, was discovered that it subcontracted with an Indian supplier which employed child labour in 2007 (The Guardian, 2007). This essay will analyse how CSR restrained the attitude of Gap in operation. Furthermore, the incident happened in Gap during 2007 and the impacts on the stakeholders will be examined. Lastly, solutions will be recommended and evaluated in order to achieve the suitable methods to better the problem of child labour.

The Case
In 2007, a British Sunday newspaper, The Guardian (2007), discovered that Gap operated unethically. It subcontracted with an Indian textile manufacturer which used child labour in clothing production for GapKids (ibid). Children who aged below fifteen worked in the sweatshop for long hours. Gap violated not only its Code of Vendor Conduct (Gap Inc., 2007) but also the United Nations Convention on the Rights of the Child (UNICEF, 2010). According to the Code and the UN Convention (ibid), workers should meet the minimum age requirement of the local law and be over 15 years old; working hours and environments must abide by the laws. In addition, the company should comply the law “to be protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child's education, or to be harmful to the child's health or physical, mental, spiritual, moral or social development” (UNICEF, n.d.).

Involved Stakeholders
Using child labour in manufacture has brought impacts to the public. Employing child workers as cheap labour helped Gap reduce costs and therefore it could make more profits (UNICEF, n.d.). However, child slavery was unscrupulous and brought more harm than good to the public image of Gap (The Guardian 2007) and, on top of that, the stakeholders, especially the consumers, shareholders and the Indian child workers.
1. Consumers
Consumers enjoyed the favourable prices as subcontractors of Gap used low-cost labour, child workers (UNICEF, n.d.), in production. Reduction of costs brought relatively higher profits, compared with employing adults in factory (ibid), to Gap. Referring to The Economist (2008), social responsibility became a more concerning factor nowadays than in the past. Consumers not only wanted the low price but also considered more on the corporation whether it was socially responsible. Impression towards Gap was unfavourable and its reputation was damaged (The Guardian, 2007).
2. Shareholders
Shareholders lost confidence towards Gap because of its unethical image. The outbreak of the news seized the public attention to the issue of child labour. On the one hand, this illicit practice ruined the public image of Gap; on the other hand, shareholders lost confidences in it. According to the stock price chart in Yahoo Finance (2011), the stock price of Gap in late-October dropped significantly and it worsened the financial condition. It was difficult for the current and potential shareholders to foresee its prospect and therefore investing capital in other stocks was preferable.
3. Indian child workers
The Indian child workers lost their schooling opportunities and liberties. Slavery occupied the time in their childhood therefore their chances of having education were lost (UNICEF, 2004). Moreover, referring to the survey done by UNICEF
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